We
have often talked about the difference between COST and PRICE. As a
seller, you will be most concerned about ‘short term price’ – where home
values are headed over the next six months. As a buyer, you must be
concerned not about price but instead about the ‘long term cost’ of the
home. Let us explain.
Yesterday, we reported that the
Mortgage Bankers Association
(MBA) is projecting that mortgage interest rates will inch up over the
next twelve months. On Monday, we explained that many experts are
calling for home prices to also increase over the next year.
What Does This Mean to a Buyer?
Here is a simple demonstration of what impact certain changes would
have on the mortgage payment of a home selling for approximately
$200,000 today:
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